March 7, 2012
Last week, General Motors and PSA announced a new alliance that would have the two sharing components and give stronger purchasing power for both. The deal is "an additional tool to the toolkit in Europe" said GM Vice Chairman Stephen Girsky to reporters. When asked what would come next in GM's plan to save Opel, Girsky declined.
"We can't tell you what our play is in Europe. We will tell you when it plays out over the next period of months and years ... I don't see the play in Europe showing up in one big bang."
This has everyone worried about what the next move will be for Opel. Currently, European production capacity is estimated to be 20% higher than needed to keep companies profitable in a weakening market.
"Excess capacity is not a GM issue, it's an industry issue," Girsky argued.
Also, GM is keeping quiet on whether it will post a thirteen year of losses in the European market. This comes on the heels of Ford announcing a $500 to $600 million dollar loss in Europe this year due to an 8.5% drop in European auto sales.
"It's not just investors who hate uncertainty. It's the workers, it's the employees. People are working really hard on this," Girsky said.
However, analysts aren't liking the silent treatment from GM. Michelle Krebs, analyst with Edmunds.com told Reuters that GM was taking risk with investors and consumers by saying they have a plan and not reveal any specifics. Also, the PSA deal doesn't solve the whole excess capacity problem.
"It's not solving their problem, which is stemming the losses, and they are basically asking us to trust that the payoff will come in the future," said Krebs.